Summary
analyzing issue of authority separate from existence of a meeting of minds
Summary of this case from Stelluti Kerr, L.L.C. v. Mapei Corp.Opinion
No. 05-12-00128-CV
06-07-2012
ANLAND NORTH, L.P., ANLAND NORTH COMMERCIAL, L.P., ANLAND 10, L.P., AND ANLAND SOUTH, L.P., Appellants v. CENTER OPERATING COMPANY, L.P., Appellee
REVERSE AND REMAND and Opinion Filed June 7, 2012.
On Appeal from the 101st Judicial District Court
Dallas County, Texas
Trial Court Cause No. 11-15940-E
MEMORANDUM OPINION
Before Justices FitzGerald, Murphy, and Fillmore
Opinion By Justice Murphy
Anland North, L.P., Anland North Commercial, L.P., Anland 10, L.P., and Anland South, L.P. (collectively, Anland) appeal the trial court's temporary injunction enforcing two, one-year parking license agreements that Anland contends it never signed or accepted. We conclude based on undisputed evidence presented at the temporary injunction hearing that Center Operating Company, L.P. (COC) failed to prove its probable right to recovery. We reverse the trial court's order granting temporary injunctive relief, dissolve the temporary injunction, and remand the case to the trial court for further proceedings. BACKGROUND
COC is an entity holding a thirty-year leasehold interest in the building known as the American Airlines Center (AAC), which is owned by the City of Dallas. COC is responsible for the management and operation of the AAC, including managing 3,000 dedicated parking spaces during AAC events.
Anland owns additional surface parking lots near the AAC, which it leased to COC during the 2009-2010 and 2010-2011 event seasons. COC and Anland negotiated and executed two, one- year license agreements for each of those seasons. Each agreement covered the period July 1 through June 30.
The parties began negotiations in the late spring of 2011 for additional one-year license agreements for the 2011-2012 season. COC's chief financial officer and executive vice president, Craig Courson, was its lead negotiator during the negotiations. Ken Reese, the executive vice president of Hillwood Investments Company, was the primary negotiator on behalf of Anland.
Reese described Anland as the entities Hillwood uses for development of the Victory Park development project in the area where AAC is located. The parties referenced Hillwood and Anland interchangeably during the injunction hearing.
The parties' negotiations continued for months and included the exchange of numerous drafts of proposed license agreements. According to Courson, COC believed the parties had reached an agreement on all material terms "towards the end of July or the first part of August." The versions of the agreements made the subject of this appeal were delivered by Courson to Reese on September 15, 2011 and contained five red-lined changes. Courson's e-mail transmitting the documents to Reese described the documents as "ready for execution," but also stated that COC was reserving its "right as to [its] contention the Plaza is included within the defined 'Arena' area," and thus subject to the agreements. The Plaza was a separate area located near the AAC. The next day, September 16, Reese, Courson, and Brad Mayne, the president and chief executive officer of COC, met. The parties dispute what occurred at that meeting as to whether there would or would not be any one-year license agreements. Anland claims it advised COC in that meeting there was not going to be an agreement, and COC maintains that topic was not discussed. That dispute is not relevant to resolution of this appeal. According to Courson, however, he and Reese did have a verbal discussion-which may have occurred at the September 16 meeting or subsequently-in which Reese told Courson he was "apprehensive" to take the agreements back to Ross Perot, Jr., the principal of Anland, for final approval because of a separate lawsuit filed against Perot, Hillwood, and other Anland entities on September 8. Thereafter, Courson and Reese continued to communicate regarding Perot's approval.
The plaintiffs in that lawsuit represented they were suing "derivatively on behalf of [COC]." COC joined that lawsuit as a party plaintiff on December 15, 2011.
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The one-year license agreements were never executed by either Anland or COC, and on December 16, Anland notified COC by e-mail that it was "not going forward at this time with the contemplated licenses that [they] were negotiating last summer." Anland suggested the parties enter into temporary license agreements to cover parking through January 1 and stated it was willing to meet to discuss usage rights beyond January 1. It requested a response by December 19 "so that COC can use these lots through the end of the year." By a separate December 16 e-mail, Anland sent COC a "true-up" on license fees for COC's use of the parking lots since July 1, 2011, noting no payments had been received since August and requesting payments for September through the present. Three days later, by e-mail dated December 19, Courson sent Anland revised drafts of the one-year license agreements without reference to the temporary licenses, stating "[a]ttached are slightly revised versions of the Ancillary Parking Agreements that I am willing to sign as soon as you approve." Anland notified COC by letter dated December 19 that, because it had refused to sign the temporary licenses, COC no longer had permission to use the lots.
COC filed the underlying breach of contract lawsuit on December 21, 2011, alleging Anland breached the September 15 versions of the two, one-year license agreements. COC also sought injunctive relief to enforce those two versions, asserting specific performance was the only remedy provided by the agreements in the event of Anland's breach. Following a half-day evidentiary hearing on January 17, 2012, the trial court granted a temporary injunction in favor of COC and ordered Anland to desist and refrain from restricting COC's access and use of the parking spaces and from engaging in any activity that "may hinder or preclude COC's anticipated use of the lots under the two agreements mentioned above." The "two agreements mentioned above" were the September 15 versions of the license agreements, which the trial court attached to the injunction order. The trial court specifically found that "the evidence presented at the hearing tends to support [COC's] claim that an agreement existed between [the parties]" and that "the evidence preponderates slightly in favor of the conclusion that the parties did have a meeting of the minds and were proceeding on what both sides understood to be agreements that were merely subject to the formality of execution, rather than that there would be no agreements unless and until there were signatures."
Anland appeals that order, contending in its sole issue the trial court abused its discretion by ordering Anland to comply with draft parking license agreements that were never signed or accepted by Anland. Specifically, Anland argues the drafts are not binding as a matter of law for at least four reasons: (1) there was no meeting of the minds on the terms of the agreements, (2) Anland's principal did not give his authority, which COC knew was required, (3) the parties intended any agreement to be reduced to a signed written document, and neither party signed the agreements, and (4) the parties' conduct after September 15 evidences that no one-year agreements were reached.
DISCUSSION
Standard of Review and Applicable Law
The decision to grant or deny a temporary injunction is within the trial court's sound discretion. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The trial court abuses its discretion when it misapplies the law to the established facts, or when the evidence does not reasonably support the conclusion that the applicant has a probable right of recovery. State v. Sw. Bell Tel. Co., 526 S.W.2d 526, 528 (Tex. 1975); Remington Arms Co. v. Luna, 966 S.W.2d 641, 643 (Tex. App.-San Antonio 1998, pet. denied) (trial court abuses discretion when fails to apply law properly to undisputed facts, when it acts arbitrarily or unreasonably, or when its ruling is based on factual assertions unsupported by the record).
A temporary injunction is an extraordinary remedy and does not issue as a matter of right. Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993) (per curiam). To obtain a temporary injunction, COC was required to plead and prove (1) a cause of action against Anland, (2) a probable right to the relief sought, and (3) a probable, imminent, and irreparable injury in the interim. Butnaru, 84 S.W.3d at 204. To show a probable right to recovery, COC was not required to establish it will prevail on final trial. Id. at 211. If, however, it failed to plead a cause of action and present some evidence that supports a probable right of recovery, a temporary injunction was not proper. T-N-T Motorsports, Inc. v. Hennessey Motorsports, Inc., 965 S.W.2d 18, 23-24 (Tex. App.-Houston [1st Dist.] 1998, pet. dism'd).
Whether an agreement constitutes an enforceable contract is generally a question of law. See Searcy v. DDA, Inc., 201 S.W.3d 319, 322 (Tex. App.-Dallas 2006, no pet.). The elements of a valid and enforceable contract are (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id. No contract is enforceable absent mutual assent. Baylor University v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007).
Analysis
We first address Anland's contention its principal did not give authority for the September 15 versions of the agreements, because our analysis of that issue results in final disposition of this appeal. See Tex. R. App. P. 47.1 (appellate court to deliver opinion as brief as practicable that addresses every issue raised and necessary to final disposition); Sonnichsen, 221 S.W.3d at 635 (mutual assent necessary for binding contract). Anland argues that, even assuming a meeting of the minds between COC and Reese, there can be no binding agreements as a matter of law because COC knew Reese had no authority to bind Anland. Specifically, Anland focuses on testimony that Reese had no authority to sign the agreements absent express permission from Perot. COC responds that Reese had actual or apparent authority to bind Anland based on his execution of the prior agreements and his position as the lead negotiator for Anland.
The evidence of Perot's required approval, beginning first with Reese's testimony, is detailed as follows:
Q.Mr. Reese, did you have any authority to enter into a license agreement as a representative of Hillwood or any Anland company on the lots?
A.No, sir.
Q.Did you need to get authorization before you could sign a license agreement on behalf of any of the Anland companies?
A.Yes, from Ross Perot, Jr.
Q.Could anyone else give you that authority?
A.No, sir.
Q.Did Ross Perot, Jr., authorize you to sign the 2011-2012 season-long license agreements?
A.No, sir.
Q.Have you ever told anyone at COC that you needed Mr. Perot's authority before you could enter into a license agreement on the ancillary lots?
A.Repeatedly. Every time we talked about it.
. . .
Q.And there were follow-up communications from Mr. Courson to you about whether Ross Perot had ever given you authority to enter into those agreements. Right?
A.Yeah. We probably had a half a dozen conversations, in addition to the one voice mail and some e-mails, with Craig asking if, you know, if Ross would be willing to go forward. . . .
Courson also testified to his communications with Reese regarding the required approval by Perot. Specifically, after first testifying that the agreements had not been signed following the September 16 meeting between Anland and COC, Courson testified as follows:
Q.You understood that Mr. Reese needed approval from Mr. Perot for these agreements?
A.Yes.
Q.And after that September 16th meeting, you kept asking Mr. Reese whether Mr. Perot had given that approval. Right?
A.Correct.
Q.[playing voice mail left by Courson for Reese on September 21]: "Mr. Courson: Hey, Ken, it's Craig. Hey, I forgot to ask you when we talked, I just wondered if you'd had any discussions with Ross on these parking agreements yet, and maybe you haven't just because of the closing or whatever. But if you could just let me know if you've talked to him or not and what his response was, e-mail would be fine. Thanks, Ken."
Q.And that is a voice mail that you left Ken Reese. Correct?
A.Yes.
Q.And he sent you an e-mail response like you had requested?
A.I'm not sure.
Q.Let's pull up Defendants' Exhibit 18. This is the same day as your voice mail. He sends you back an e-mail that just says, "No decision yet." Correct?
A.Correct.
Q.Did you receive this e-mail?
A.Yes.
Q.And a few days later, you asked Mr. Reese again whether Mr. Perot was going to approve the parking agreements?
A.I - I don't know.
Q.Let's look at your September 26th e-mail to Mr. Reese. It is Defendants' Exhibit 19.
A.(Reviewing the exhibit) Yes.
Q.And point 2 of your e-mail says, "Any word from Ross on ancillary parking agreement execution?"
A.Yes.
Q.And Mr. Reese never communicated to you that he had received approval from Mr. Perot for these parking agreements. Correct?
A.Correct.
This undisputed testimony shows that Reese had no authority to bind Anland to the one-year license agreements absent Perot's approval. The testimony is further undisputed that Perot's approval was never given. Absent that assent, the September 15 versions of the agreements are not binding contracts as a matter of law. Sonnichsen, 221 S.W.3d at 635.
COC's argument that Reese had apparent authority to bind Anland to the one-year license agreements as a result of his execution of prior agreements and his role as lead negotiator fails in light of the express testimony that Perot's approval was required and COC knew that approval was required. See, e.g., Gaines v. Kelly, 235 S.W.3d 179, 182 (Tex. 2007) (standard is that of reasonably prudent person using diligence and discretion to determine agent's authority); Restatement (Third) of Agency § 2.03 cmt. d (2006) (if agent tells third party transaction is beyond agent's authority, third party's belief of authority not reasonable absent credible change in circumstances augmenting agent's authority).
COC's only response to the quoted testimony that Reese had no authority absent Perot's approval is the reference to one statement by Courson during redirect examination by COC's counsel at the injunction hearing that he was "not sure, quite frankly," whether it was Perot's approval that was needed to allow Reese to sign the agreements or approval "to even have a deal." This one statement does not present a fact issue as to Reese's authority, actual or apparent, in light of the uncontroverted evidence before the trial court. While the trial court commented at the injunction hearing that it was "unable to credit" Reese's testimony regarding what was said at the September 16 meeting, that comment does not affect our analysis of the evidence as to the required approval. First, the trial court's statement was directed to Reese's testimony he informed COC on September 16 "there was going to be no agreement on these parking spaces for 2011-2012" and not to whether Perot's approval was required. Additionally, Anland does not rely on Reese's testimony or the conduct of the parties as to the September 16 meeting for purposes of this interlocutory appeal. And neither Anland nor COC suggests anything said at the September 16 meeting contradicts or creates a fact dispute on the issue of Perot's required approval.
COC's only cause of action against Anland was for breach of the September 15 versions of the one-year license agreements, and the trial court's order was based solely on those documents that it attached to the injunction order. Accordingly, there was no other theory under which the trial court could have granted an injunction in favor of COC.
A trial court abuses its discretion when it misapplies the law to established facts or when the evidence does not reasonably support the conclusion the applicant has a probable right of recovery. Sw. Bell, 526 S.W.2d at 528-29. The undisputed facts presented at the temporary injunction hearing were that Anland's principal had not approved the license agreements and COC knew the approval was necessary. Thus, the trial court erred in finding the September 15 versions of the unsigned agreements attached to the injunction order "were merely subject to the formality of execution" and concluding COC would probably prevail at trial as to those specific documents. We sustain Anland's issue.
CONCLUSION
The evidence before the trial court showed an essential element for valid and enforceable contracts-Anland's assent-was absent. Searcy, 201 S.W.3d at 322. Accordingly, as a matter of law, the trial court abused its discretion in granting a temporary injunction specifically enforcing the September 15 versions of the one-year parking license agreements. We reverse the trial court's order granting temporary injunctive relief, dissolve the temporary injunction, and remand the case to the trial court for further proceedings.
MARY MURPHY
JUSTICE
120128F.P05
Court of Appeals Fifth District of Texas at Dallas JUDGMENT
ANLAND NORTH, L.P., ANLAND NORTH COMMERCIAL, L.P., ANLAND 10, L.P., AND ANLAND SOUTH, L.P., Appellants
V.
CENTER OPERATING COMPANY, L.P., Appellee
No. 05-12-00128-CV
Appeal from the 101st Judicial District Court of Dallas County, Texas. (Tr.Ct.No. 11- 15940-E).
Opinion delivered by Justice Murphy, Justices FitzGerald and Fillmore participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court for further proceedings. It is ORDERED that appellants Anland North, L.P., Anland North Commercial, L.P., Anland 10, L.P., and Anland South, L.P. recover their costs of this appeal from appellee Center Operating Company, L.P.
Judgment entered June 7, 2012.
MARY MURPHY
JUSTICE